HIRE Act poses significant threat to India’s IT sector, warns Jairam Ramesh

Congress leader Jairam Ramesh Tuesday expressed concern over the Halting International Relocation of Employment Act (HIRE Act) introduced by Senator Bernie Moreno in the US Senate, warning it could severely impact India’s IT services, BPO, consulting, and global capability centers (GCCs).

“The Bill has a direct and deep impact on India’s IT services, BPO, consulting and GCCs,” Ramesh said in a post on handle X. “Other countries like Ireland, Israel, and Philippines too will be impacted but the maximum effect will be on India’s exports of services which has been a marked success story over the past quarter of a century,” he added.

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The proposed legislation seeks to impose a 25 per cent tax on US companies outsourcing work to foreign entities, aiming to curb the relocation of white-collar jobs abroad. Ramesh believes this reflects a growing mindset in the US that white-collar jobs should not be “lost to India,” mirroring concerns over blue-collar jobs lost to China.

“If ever HIRE becomes a reality, it will light a fire in the Indian economy which may have to face a new normal in relation to the US,” Ramesh cautioned, highlighting the potential consequences for India’s economy.

The Bill’s fate remains uncertain, with possibilities of modification or stagnation. However, Ramesh emphasised that it underscores the challenges facing India-US economic ties, which have encountered several setbacks over the past year.